Ethiopia’s government moved aggressively in 2024 by banning the import of vehicles powered by internal combustion engines while cutting import duties on electric vehicles. Since then, officials say EVs have grown from under 1% of new and used vehicles entering the country to about 6%, a share that sits above a reported global average of roughly 4%.
That shift is unusual for a country with low car ownership and limited domestic manufacturing. Ethiopia imports most of its vehicles, and for decades the market has been dominated by used cars because steep import tariffs made new vehicles unreachable for most households. The country has only about 13 vehicles per 1,000 residents, far below an African average of 73 cited in recent reporting.
The ban was driven primarily by financial pressure rather than pure climate policy. Ethiopia has long relied on fuel subsidies that strained public finances, and the country defaulted on its sovereign bonds in 2023. In 2024, it received a $3.4 billion support package from the International Monetary Fund, adding urgency to policies that reduce imported fuel demand.
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